Ocado’s share price has plunged almost 15% after it revealed that its partner, Canadian supermarket Sobeys, has paused the launch of its new warehouse in Vancouver as the pair agree to “end terms related to their mutual exclusivity”.
The online grocery specialist inked a deal with Sobeys in 2018, with Ocado contracted to build warehouses for the grocer, and power its online operations through Ocado Smart Platform.
The online grocery giant said: “Ocado and Sobeys have decided for now to focus their joint resources into driving order and sales volumes across the current network.”
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This comprises 3 customer fulfilment centres in Toronto, Montreal, and Calgary, and manual fulfilment solutions in nearly 100 stores. Ocado Group said it would keep the warehouse “under regular review”, with the site able to commission and scale quickly when required.
The technology giant highlighted that its partners in North America, Kroger in the US and Sobeys, Canada’s second biggest grocer, had both reported strong growth in digital sales during their latest quarterly results.
It insisted that its financial guidance for its current financial year remained unchanged, alongside its target to be cash flow positive in the mid-term.
The news follows Ocado’s relegation from the FTSE 100 earlier this month after its valuation fell from a £22bn high in the pandemic to £3.1bn. Sobeys putting the brakes on expansion could also hinder any potential plan for the online player to switch to the New York Stock Exchange.
Last month, The Telegraph reported discussions had been held with Ocado investors over recent weeks, where the idea of moving its listing to America was spoken about in detail.
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